These are consolidated actions for declaratory judgment instituted by plaintiff, The Insurance Company of the State of Pennsylvania, hereinafter referred to as Pennsylvania, and plaintiff, Zurich Insurance Company, hereinafter referred to as Zurich, for this court's determination of their duty, as well as that of a party defendant, North River Insurance Company, hereinafter referred to as North River, to defend and indemnify certain alleged insureds in an action now pending before the United States District Court for the District of New Jersey.
There is no dispute as to the essential facts, which disclose that on the date in question, Sunday, April 3, 1960,
defendant Pasquale V. Palmieri was sole proprietor of a gasoline service station in the Township of Waterford. During the course of operating said service station, Palmieri found himself in need of additional gasoline and, as was his practice and business custom, sought to obtain same from defendant R. Louis Ruberton, a marketer for defendant Sinclair Refining Company. Upon contacting Ruberton, Palmieri was informed that Ruberton could not make the requested delivery due to personal commitments. Ruberton told Palmieri that he could use Ruberton's tank truck, obtain the gasoline and make the delivery himself. Ruberton allowed Palmieri to deliver his own gas, apparently because Palmieri had previously worked for him, but Palmieri was not paid for these personal deliveries. Pursuant to Ruberton's suggestion Palmieri delivered his own gasoline and while in the process of returning the truck to Ruberton was involved in an accident with Roseann and Alfred Tagliaferri, party plaintiffs in the Federal District Court suit.
The crucial issue before the court is, which insurer or insurers afford coverage to Palmieri? This requires interpretation of the omnibus and garage keeper's exclusion clauses within the affected policies, as well as the "Other Insurance" clauses contained therein. To alleviate possible confusion in the relationship of the several parties it should be noted that Palmieri is insured by Pennsylvania, Ruberton by North River and Sinclair Refining Company, hereinafter referred to as Sinclair, by Zurich. Palmieri, Ruberton and Sinclair are all named insureds under policies of liability insurance with their respective carriers.
Pennsylvania asserts that the garage keeper's exclusion in the North River policy does not exclude coverage for the permissive user Palmieri. The exclusion upon which this contention is based is found in the omnibus clause of the North River policy which provides,
"III. DEFINITION OF INSURED. (a) With respect to the insurance for bodily injury liability and for property damage liability
the unqualified word 'insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either. The insurance with respect to any person or organization other than the named insured or such spouse does not apply: (1) to any person or organization, or to any agent or employee thereof, operating an automobile sales agency, repair shop, service station, storage garage or public parking place, with respect to any accident arising out of the operation thereof, * * *" (Emphasis added)
North River, on the other hand, asks for a determination that Pennsylvania is primarily responsible for coverage by reason of its issuance of a policy of insurance to Palmieri and acceptance of premiums paid by him. Should this court be inclined to agree, responsibility would be predicated on the following provision of the Pennsylvania policy permitting coverage.
"Division 2 -- Premises -- Operations -- Automobiles Not Owned or Hired: The ownership, maintenance or use of the premises for the purpose of an automobile repair shop, service station,storage garage or public parking place, and all operations necessary or incidental thereto; and the use in connection with the above defined operations of any automobile not owned or hired by the named insured, a partner therein or a member of the household of any such person." (Emphasis added)
It is apparent that the responsibilities and duties of the insurers hinge on the interpretation placed on the garage keeper's exclusion as it applies to the facts and circumstances before this court. If the exclusion is held to operate, Pennsylvania must bear primary responsibility, but if it does not operate, a different duty arises.
Ownership of the tank truck in Ruberton is not denied, nor is the fact of permissive use granted by Ruberton to Palmieri. Applying these facts to the omnibus clause of the North River policy leaves no doubt that Palmieri qualified as an additional insured thereunder. ...